Report Reveals New Android Licensing Fees in Europe

Posted on October 19, 2018 by Paul Thurrott in Android with 58 Comments

Google will comply with the demands of EU antitrust regulators by making Android more expensive. Now we know how much more expensive.

As you may recall, Google announced last week that it would comply with a recent EU ruling by raising the Android licensing fees it charges to hardware makers and wireless carriers, but only in Europe. This response, I noted, was brilliant, as it gets to case the European Commission as the bad guys while it continues its illegal bundling practices.

But the question, of course, concerns how much Google will charge its partners to do business in Europe. After all, in the cut-throat, low-margin world of hardware devices, even a few cents can make a big difference.

Well, citing “confidential fee schedule documents,” The Verge says it has the answer: Google will charge its partners $2.50 to $40 more per device, depending on its features, and depending on the country, to use Android in Europe.

Yikes.

Countries like the UK, Sweden, Germany, Norway, and the Netherlands will see the highest fees, and devices with higher-end capabilities will likewise require higher fees. According to the publication, Handsets with a pixel density higher than 500 PPI would have to pay a $40 fee to license Google’s apps. 400 to 500 PPI devices would pay a $20 fee, and devices under 400 PPI would pay $10. In some countries, for lower-end phones, the fee can be as little as $2.50 per device, The Verge claims. And tablets are on a different pricing schedule.

 

Join the discussion!

BECOME A THURROTT MEMBER:

Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Register
Comments (58)

58 responses to “Report Reveals New Android Licensing Fees in Europe”

  1. Avatar

    MadsM

    Every single time the EU makes a move in the technology field, supposedly on my behalf as a EU consumer, I end up paying more.

    • Avatar

      Watney

      In reply to MadsM:

      Precisely! Although I don't live in the EU, it looks to me as if the average European consumer just got screwed. Everyone uses Google products. I can't imagine people are going to ditch Google products for something else, what else! If anything it will drive Apple sales. This is insane.

    • Avatar

      nbplopes

      In reply to MadsM:


      That is what Google wants you to think. Honestly, if you were not paying already for the apps, why is Google now charging you for it? Because it does not come preinstalled? Think man, think!


      If the players are smart they will offer you to buy the Google bundle as an option at start up. It Is than up to you to go and ask Google why is It charging you for something that it puts away for free anywhere else.


      Now there is choice for people that would like to use Android yet not have Google all over their data. Maybe they prefer MS, Facebook, Microsoft or prefer to use service independent apps ...


      The people that actually would not mind having Google over their data they now still are required by Google to pay on top for the privilege. This are the ones getting screwed, but not by EU, but Google!!!!!


      Cheers.


      • Avatar

        MadsM

        In reply to nbplopes:


        There's nothing relevant to what I wrote in your reply to me. But I guess it felt good to get it out.

      • Avatar

        maethorechannen

        In reply to nbplopes:

        why is Google now charging you for it?


        Google is now charging you for them because the Commission has decided that the way Google was making money on those apps before was anti-competitive. If they're not going to get their money one way, they'll get it another.

        • Avatar

          nbplopes

          In reply to maethorechannen:


          But you were already paying them with the data you create, weren’t you? You know, to then improve their Ad business targeting you with better Ads. You still want to provide them with that data right in exchange for free apps. Correct?


          What has changed?


          Take for instance Chrome, wasn’t it created also to protect their Ad business and services against the likes of Microsoft?


          I guess they think it does not need to be protected anymore hence they are making you pay for it now on top of requiring your data to improve the Ad service. They are testing this idea.


          That is what it is about!!’!


          • Avatar

            maethorechannen

            In reply to nbplopes:


            What has changed?


            They can no longer force manufacturers to include both Chrome and Search with the rest of the gapps. And it's Chrome and Search where they get most of the ad revenue and user data.

            • Avatar

              nbplopes

              In reply to maethorechannen:


              So iif Chrome and Search are the primary vessels of their Ad business, and if they can no longer force OEMs to give them away in their products the solution to assure that users will keep on using them it’s then to have users paying to use it?


              Is google serious or just had their ego spanked hard?


              If OEMs play their cards well soon enough Google will start paying them to have their software bundled. Not the other way around.

      • Avatar

        lvthunder

        In reply to nbplopes:

        Google isn't going to be charging end users for these apps. They are going to charge the headset makers to install these apps. Just like how Microsoft charges OEM's for Windows.

      • Avatar

        HellcatM

        In reply to nbplopes: What would be interesting is if Google made the same changes in the US, but didn't charge more for their Pixel phones. Would more people buy Pixel phones if say the Samsung S9 went up in price but the Pixel phones didn't?
    • Avatar

      lvthunder

      In reply to MadsM:

      Welcome to government regulation. Regulation always costs consumers more. Even though most didn't see it look at how much GDPR cost businesses all over the world.

    • Avatar

      chrisrpatterson

      In reply to MadsM:

      The EU doesn't do anything on behalf of consumers. The EUs primary goal is to protect competition which is about protecting other companies. This may or may not indirectly benifit or hurt consumers.

  2. Avatar

    Mark from CO

    I'm confused. I thought the issue was bundling and apps. Why is the pricing tied to screen resolution? Anyone help me out?

  3. Avatar

    Ron Diaz

    I honestly don’t get why people are so upset about this. I have to pay for Windows 10 on my PC and it is full of ads and Microsoft “telemetry” (tracking). Why can’t Google charge for Android? If you don’t like it don’t buy it. I missed where Google is forcing anyone to buy their product...

  4. Avatar

    AnOldAmigaUser

    I would be happy to pay for Google apps when they stop collecting information about me, and letting actual humans from third parties read my email.

  5. Avatar

    AnOldAmigaUser

    If Google wants to be paid for their applications, can I assume that they will not be collecting user data for those applications people are paying for?

  6. Avatar

    red.radar

    implementing policy is a tricky thing. While I believe the EU was correct in their litigation against google, the actions I believe will wrong effect in the short term.


    But its going to be interesting to follow to see how Consumers, Manufacturers, Governments respond


  7. Avatar

    Vladimir Carli

    The fact that they are doing it by country and that they are including countries that are NOT in the EU, as Norway, makes me think that the plan was to raise these fees since the beginning. I hope it’s time people realize how dangerous google is and stop using their products.

    V.

  8. Avatar

    ben55124

    Samsung Note 10 EU edition featuring 720P.


  9. Avatar

    MutualCore

    This is another example of how Google will try to squeeze every last dollar from their customers and Android OEMs. Also it's more evidence why Microsoft needs their own mobile platform with all the services(Search, Maps, Music, something equivalent to Youtube). Otherwise we're all just hostage to Google's whims.

  10. Avatar

    digiguy

    I think there is huge confusion about this topic and many comments show it...

    Google never said OEMs have to pay for the store, just that they have to pay to put Chrome, youtube, assistant ecc.

    So what's the issue? OEMs such as Samsung already have their (crappy) browser and they can put Bing and other services instead... And then people can download google apps from the Store.

    If manufactures pay for google apps they are plain stupid.

    As for forked android (à la Amazon) that is another issue, but forked android will never go anywhere...

  11. Avatar

    Bob Shutts

    “Thanks EU!” -Tim Cook.

  12. Avatar

    christian.hvid

    The Verge also notes that "Google is also offering separate agreements to cover some or all of the licensing costs for companies that choose to install Chrome and Google search on their devices as well, according to a person familiar with the terms." In other words, manufacturers sticking to the existing bundled offer will likely not be affected at all. And I suspect most of them will, since very few have any incentive whatsover to replace Chrome and Google Search - regardless of licensing fees.


    There's nothing brilliant or even devious about Google's new licensing terms. They won't be able to recoup any significant part of their $5B fine, and even if Samsung (this whole thing is about Samsung, after all) agrees to pay up to $40 per device in licensing fees, Google will also lose ad revenue when Samsung starts directing web searches to their own services.


    Also, Google needs to be very careful to not overcharge manufacturers like Samsung, since any price hikes on top-shelf Android devices will play right into Apple's hands.

    • Avatar

      PeterC

      In reply to christian.hvid:

      I think its pretty obvious that its an aggressive strategic move by google to counter Samsung and Huawei who have huge European sales business and stop them taking android and going their own way. Hence the DPI license cost model. google wish to leverage European consumer anger to stop the big Asian/Chinese brands from fragmenting android. Google are protecting the crown jewels of the play store - which has already been demonstrated to be vulnerable with the non-play store release of Fortnite some months back.


      it also plays into googles plans to increase its own brand pixel sales which are pretty meagre in Europe and will benefit in point of sale terms if the other brands decide to go full aggressive on google

      • Avatar

        christian.hvid

        In reply to PeterC:

        I think that, above all, Google is afraid of losing bits and pieces of its search monopoly to competitors like Bing and Baidu. That's why manufacturers get a much sweeter deal if they agree to include Chrome and Google Search - which most will do anyway, since that's what their customers want.


        As for the Pixel phone, Google is its own worst enemy if they're looking to increase sales. After all, Europe is more than just Germany, France, Ireland, Italy, Spain and the UK (the only six EU countries where the Pixel is sold).

        • Avatar

          PeterC

          In reply to christian.hvid:

          Well put. The issues of healthcare and automotive are spot on too. we’re seeing more visible moves by the EU to create and establish independent aerospace, security and financial systems. This is part of that narrative and google aren’t happy about it. However due to apples much vocalised data compliance with eu directives I suspect we will see some preferred supplier status on some projects. It’s partly why there’s been the story’s about “Chinese chips in apple servers and why they’re strongly refuting the claims. That’s gonna drive some people nuts.

    • Avatar

      christian.hvid

      In reply to christian.hvid:

      While the whole licensing issue is a tempest in a tea cup, the EC ruling has another, more significant, effect.


      Suppliers of automotive, industrial or healthcare solutions are typically looking for control devices with a trimmed-down AOSP system, without any preinstalled Google services. But there aren't many of those to choose from, except from third-tier Chinese manufacturers that aren't hamstrung by agreements with Google.


      With Google no longer being able to prevent Android licensees to use alternative versions of the OS, there's suddenly a whole new market in Europe for high-quality AOSP-based industrial devices from first class manufacturers like Huawei and Samsung. That's the big win, not the license unbundling.



  13. Avatar

    lordbaal1

    It's a matter of time before they implement this in all countries.

    Android is supposed to be free, and now they are charging Europe for it?

    This might be the downfall of Android.

  14. Avatar

    jrickel96

    Hmm, Windows for free on mobile handsets might start to look appealing soon.

  15. Avatar

    tanvir369

    Recently wifi stucks about Funny WiFi names, You guys can see this

  16. Avatar

    Geoff

    I'm really hoping that this eventually leads to something good.


    In theory, a hardware vendor can now take the free AOSP operating system, and add a 100% Google-free package of 'extras', and we'll have a decent phone that doesn't harvest the user's data. That's worth supporting.

  17. Avatar

    dontbe evil

    finally... time to pay you (don't) be evil google

  18. Avatar

    james bond

    Nice article as always. Find here short caption for profile picture.

  19. Avatar

    PeterC

    So there you have it. Not quite the story some thought it was is it.


    Clearly trying to give their line of pixel phones competitive advantage in terms of price in a desirable market they’re not really a big player in yet. (android is – pixel isn’t).


    Clearly targeting Samsung and Huawei who do have a very big European presence in sales and handset terms.

    Apparently sticking two fingers up to the EU – errr no. Samsung and Huawei via the EU – yes.


    And obviously not abusing their dominant position in Internet search/advertising at all – no the issue of android/play store/search/pre-installed google services is all just a non-issue and the EU is being anti-competitive to us at google. Yeah right Mr Pichai.


    All they hope for now is a big enough public outcry to deliver an outcome that neuters Samsung and Huawei and other manufacturers from going their own way. Hmmm.


    As ive said before, apple will have a field day any which way you look at it.

  20. Avatar

    nbplopes

    I am not sure how Google will get away with this.


    I mean, having users pay for their apps when their apps are free anywhere else but in Android. I guess it will depend how much people value Google apps. A case can be made about the Play Store, but still, this is like going to a shopping mall and have to pay just to get in.


    Anyway, the more aggressive Google gets with this the better are the news for Apple. All their apps are free in that ecosystem and the non existence of the Play Store is irrelevant.


    I think this may be even better news for MS. Imagine a Windroid store ... :)


    Some people may consider this move brilliant, but it’s one of those things I believe it can go either really well or really bad.



    • Avatar

      HellcatM

      In reply to nbplopes: As we see with Amazon who makes tablets without the store, they don't sell well. Most people want the Play Store because they want the Google apps. Now if every Google app had an as good or better alternate app this could change, but some (like maps) don't. Also a lot of people want to use Google to search..even though they could just use a browser to search Google most want it easy access. Some users use Google Assistant, I guess people might switch to Alexa or maybe even Cortana if they couldn't use the built in assistant.

      Very few people use apple most of the apple apps. They use Google maps instead of apple maps, they use Gmail, and Chrome (even though they can't have it as their default app)...etc. If apple suddenly made it so their users couldn't use Google services...well they'd probably still use apple products, but they wouldn't be as happy because apple services suck.

      I don't think this will hurt Google one bit. People will be upset but they'll get over it because they like Google services.


      • Avatar

        nbplopes

        In reply to HellcatM:


        Most people perceive these apps as free. Now that Google put a value on it, let’s see how people value it actually. Do you think that $40 is expensive on top of sharing all your data? Why? Have that argument with Google.


        If you think Apple services suck or not it’s irrelevant. It’s about how much you want to pay for Google Apps. It is Google that is making you pay for something that said to you that was free, not the EU or Apple.


        It is also about how much are OEMs ready to pay Google in advance.

  21. Avatar

    Bats

    Again, I don't blame Google for this.


    This is what happens when you "tax" and/or "regulate" a business. LOL...people don't realize the trickle-down effect and how that indirectly but directly effects them. 

    This is how the world works. 

    • Avatar

      HellcatM

      In reply to Bats: In other words you give a tax break to a company and the money doesn't trickle down to the employees but if you put a tax on a company the company will raise prices on the consumer. I don't blame Google either, what they did was smart, but the system still sucks. I'm all for the rich paying more taxes, they make a fuck load more than we do, but sellers don't have to make over a 100% (sometimes over $200%) profit and then raise the price when they have to pay up to $40 more per device. Google makes no money off the OS, they make money off the apps and services, if a carrier has the option to take said apps and Google loses money. Charging so much for the phone is the issue and we see that One Plus sells high end phones at a decent price which is the way it should be. Even Google does this, instead of following One Plus, they follow the other companies. Google should want people to buy the Pixel, and if they charged $550 for it they'd sell a lot more and probably make more money. That's what they did with the Nexus phones, the problem with those phone is they didn't have them in Verizon.

      On a side note does Verizon have an exclusivity deal with the Pixel phones or Google phones? If Google decided to make a phone thats a little different and bring back the Nexus name and put them in other carriers to sell could they do that?

      Also can't handset makers just do what Amazon did and use the version of Android that doesn't have the store? It would have been interesting if they had an Android ballot were they let consumers choose if they want the store or not. If they say No then it'll leave the phone as is, if they say yes it'll either download the store (if possible) or reboot and reinstall Android with the store. Let the customer have the option and then maybe Google wouldn't have charged as much because most people would want the store.


  22. Avatar

    maethorechannen

    depending on the country


    I think they're asking for trouble on that one. Besides being a slap in the face for the Single Market, you can't stop people buying in one country and importing into another.


    UK, Sweden, Germany, Norway, and the Netherlands


    Interesting mix of countries - including one that's not in the EU, one that's leaving the EU and one that's staying in the EU but is not in the Euro. And Germany has the increasingly popular AfD. You can't help but wonder if there's more to it than just picking out wealthier countries.

    • Avatar

      slerched

      In reply to maethorechannen:

      Except most EU companies have duty to pay on an import. There are ways around it but if they do the normal import route, they'll potentially pay more than they would just buying local to begin with.


      • Avatar

        christian.hvid

        In reply to slerched:

        I think maethorechannen is onto something here. The EU is a customs union, meaning there are no import duties within the Single Market. A phone imported to Italy can be sold and shipped to the Netherlands with no extra duties. I don't see how Google would be able to prevent this. In fact, this would be an act of parallel import, which is encouraged by the EU.


        As for including Norway in the bunch: the new licensing rules apply to the European Economic Area, which is basically the EU + Norway, Iceland and Liechtenstein. The latter three, of course, had nothing to do with the EC ruling. But that distinction may be too subtle even for the "brilliant" Google.

        • Avatar

          maethorechannen

          In reply to christian.hvid:


          I'm starting to wonder if Google views the EU as an existential threat. In which case, hitting net donor countries where support for the EU is weak or weakening hardest makes a lot of sense.

          • Avatar

            christian.hvid

            In reply to maethorechannen:

            Actually, I think the article above, and Paul's coverage of the issue in general, is grossly misleading.


            As far as we know, Google is not going to charge a penny extra for its Android license - regardless of country - unless the licensee wishes to unbundle the offer and only install Google Play, in which case the licensee must compensate Google for lost ad revenue. Most licensees will continue to use the bundled offer at no extra charge for themselves or their customers, but unlike in other parts of the world, manufacturers in the European market will at least have a choice.


            How this can be construed as "Google punishing EU citizens" is beyond me.

      • Avatar

        maethorechannen

        In reply to slerched:


        Except most EU companies have duty to pay on an import.


        Not when they import from another EU country. Same for people - if a Samsung phone is cheaper on amazon.fr than amazon.co.uk I can just get it from amazon.fr. Google can't stop that.

  23. Avatar

    RM

    So, now Microsoft can add it's own store app for Android and tie it into the Microsoft store and sell phones without charging a fee to partners.

  24. Avatar

    giskemo

    Not fair … Norway isn't even in the EU..

  25. Avatar

    arjun101

    Thanks for this article and hope to see more from you like these

    Truthteller

Leave a Reply